Opposition Leader Steven Myers is accusing Finance Minister Wes Sheridan of lying to Islanders about the way he’s managing the provincial deficit, but Sheridan says he is simply following the advice of the auditor general.

It all centres around a $25-million payment the province received from the federal government in the 2012-2013 fiscal year.

This payment was the first installment of a total $39 million in transitional funding to help the province roll out the HST.

Although the province received $25 million of that HST transitional money in 2012-13, Sheridan says the auditor general advised him all $39 million should be accounted for in the year the HST was implemented — the current fiscal year.

In a news conference Thursday, Myers said he believes Sheridan is trying to use the money in both fiscal years to try to make his deficit look better.

“I think that Wes Sheridan is lying to Islanders,” Myers said. “I think that this $25-million that he’s trying to spend twice, he’s trying to use it to make Islanders think he’s doing a better job than he is.”

But Sheridan firmly denied Myers’ accusations.

He says he did originally plan to use the $25 million in last year’s budget, and would have preferred to do so. But three weeks ago, as final work was being done on the 2012-13 books, the auditor general advised him he should account for the money in this year’s budget.

“There’s no question why we did it. We were asked to by the auditor general, we changed our books to reflect that,” Sheridan said.

Since P.E.I. received several million more in revenues than expected through corporate and personal taxes last year, leaving things as they were would have meant a much improved deficit for 2012-13, he added.

“Who would ever want to put a $78 million (deficit) finish out in the books when I could have had a $58 million (deficit) finish and come in better than expected on our budget?” Sheridan said.

“I would have loved to have shown the public that we came in and overachieved… but the auditor general gives an opinion and that’s what we have to follow.”

But Myers still questions this. During his news conference Thursday, he called for Sheridan to produce all correspondence between his department and the auditor regarding this transaction.

“It raises concerns about whether or not the books of this province of Prince Edward Island are even accurate in the least bit,” he said.

“The treasurer says that he has double booked this on the orders of the auditor general, so we need to get to the bottom of that statement and that’s the purpose of the steps we have taken today.”

Auditor General Jane MacAdam told The Guardian she did not order Sheridan to change his accounting of the $25-million, but did advise him it would fall more in line with proper accounting standards.

“We sat down and had a discussion and brought it to their attention that there is a standard that governs how this revenue gets recognized, and after that discussion they realized that an adjustment was required,” MacAdam said.

“But it’s their decision whether or not to make that adjustment. I can’t force them to make an adjustment. If they did not make the adjustment, I may have qualified my audit opinion.”

She added that discussions like these are a normal part of the auditing process, even into the last weeks before the blue books are released by the province.